Customer Service powered Growth — Zappos going from 0 to a Billion USD in 10 years
Zappos.com is an online shoe and clothing store. Started in 1999, it quickly grew to a billion dollar enterprise in 10 years. In 2009, Zappos was acquired by Amazon for $1.2 billion.
Zappos identified early Customer Service to be their WOW. Zappos Brand was to be built around customer service.
To build a company powered by customer service meant changes across the organization not just in the customer service department. Here 3 ways Zappos succeeded delivering superior customer service in the early days of e-commerce.
Focus on all customer Touch Points
Interestingly for an online company, Zappos laid heavy emphasis on the telephone channel. Customer calls did not usually result in a sale also.
“There’s a lot of buzz these days about ‘social media’ and ‘integration marketing’. As unsexy & low-tech it may sound, our belief is the telephone is one of the best branding devices out there” — Tony Hsieh, CEO at Zappos
Zappos had the customers undivided attention for nearly 5 minutes when a customer calls. Aim was to make it an experience that they’d remember & hopefully tell others about it. Word of mouth was very powerful.
When most e-commerce companies of the time buried their customer service number under layers of FAQs & self help pages. Zappos had it prominently displayed in each of their web pages.
Build engagement & trust than bombarding with Marketing Buzz
Building trust at every interaction helped increase the overall lifetime value of the customer.
For example — if a customer calls for a product that is out of stock, the service operators were trained to look up competitors websites & re-direct the customer to the competitors. Zappos may have lost the sale in that transaction but it helped build trust.
Zappos did not adopt the usual operational metrics like Average Handle Time. The longest call Tony notes was almost 6 hours long. Aim was to build a deeper connect with the customer sacrificing cost efficiency in call handling.
There were also no call scripts for the service centre operators to make the interactions more personal. Inernally, Zapoos refers to this as Personal emotional connection (PEC). Service operators were also empowered & trusted to take on the spot decision to act on customer needs.
When customers were being bombarded daily with advertisements & marketing, these interactions stood out in the customer’s mind.
Deliver WOW moments
Zappos made conscious effort to surprise loyal customers with upgrades like overnight shipping. It helped create a WOW factor.
To cut shipping time, Warehouses were run 24/7. Zapoos even shifted their warehouse location to a more expensive warehouse option that was 15 minutes away from a UPS hub (their shipping partner).
Doing a surprise early deliveries & running 24/7 was not cost effective for Zappos but it helped create the WOW factor for customers.
Interestingly nearly every organization “claims” to serious about customer service. Key difference is Zappos deeply integrated customer service in their work activities. That includes their processes, HR polices, hiring performance metrics, IT systems, culture etc. They succeeded in the hard bit of actually ‘walking the talk’ which most companies fail to.
Zappos CEO Tony Hsieh in his book Delivering Happiness outlines 3 critical elements Zappos invested in to build a growth engine. Tony calls it BCP strategy — brand via customer service, culture & people.
Book provides insights into the little things that are needed to actually convert ‘talk & plans’ to actual ‘execution’.
